Plaintiffs James and Sharon Rowe filed an action in district court, contesting terms regarding a note of obligation on their property against Defendant loan servicers, Aurora Commercial Corporation and Nationstar Mortgage, LLC. Pursuant to Fed. R. Civ. P. 12(b)(6), the district court dismissed the plaintiffs’ claim for failure to state a claim. The district court also determined that a leave to amend the complaint would be futile and denied the plaintiffs’ motion. The plaintiffs made a timely appeal.

The Fourth Circuit Reviewed the District Court’s Decisions De Novo

The plaintiffs appealed the district court’s decision to dismiss their action for failure to state a claim and the district court’s decision to deny leave to amend the complaint.

For the plaintiffs’ first claim the Fourth Circuit applied the Twombly-Iqbal standard, requiring the plaintiffs to state a plausible claim on the face of the complaint. The Fourth Circuit considered the issue de novo.

For the plaintiffs’ second claim the Fourth Circuit also applied a de novo standard of review. While the Fourth Circuit highlighted that a district court’s denial of a motion for leave to amend is generally reviewed for abuse of discretion, the Fourth Circuit applied de novo review because the motion was denied on futility grounds, which requires review akin to a motion to dismiss.

The District Court’s Decisions Were Affirmed

The Fourth Circuit affirmed the decision of the district court, dismissing the plaintiffs’ complaint for failure to state a claim and denying the plaintiffs’ motion for leave to amend the complaint.